Television Programming



Week 5. Lecture 2. Thursday, May 2, 2002

Video clips:

Organization and Structure of Television

100m homes have TV in America, roughly 99% of population. 85% have cable. About 14% have satellite. TV Sets in homes: 22% have 1 TV, 40% have two and 41% have 3. (81% have two or more). TV Viewing: 7 hours a day on average. Varies by season. February: 7.5 hours; July 6.5 hours

1. Older broadcast networks NBC, CBS, ABC.

Each owns 12-15 stations; each is affiliated with about 200 other stations (meaning that they provide programming to stations owned by others. These stations are thus called affiliates.). The networks are thus primarily delivery systems. Until recently, they have not owned the shows they broadcast; rather they make revenues from the advertising that accompanies the shows they broadcast.

Each of the networks pulls in about 9-13% of the viewing population. 1998-99 season. Prime Time. CBS: 13.1 million households; NBC: 12.7m; ABC: 11.8m; Fox: 10.8 m 1999-2000 season: ABC, 14.2m households in prime time; CBS 12.4m; NBC 12.3m; Fox 8.9 million. November 2000: NBC 13.87m households, ABC 13.86m, CBS 11.98m, Fox 9.56m

2. Newer networks: Fox, WB, UPN and Pax.

Fox established in 1986 by Rupert Murdoch. It is a division of News Corp., the Murdoch-led media conglomerate. Why did he start Fox? He already owned 20th Century Fox studios; creating a TV network gave him an assured outlet for programming.

Fox started slowly, with programming just two nights a week. Fox’s strategy was to do what no one else was doing -- and that was to target (a) Men -- with shows such as "Married with Children" and NFL. This is the single most desirable market for advertisers and hard to reach. (b) Youth -- with shows such as Beverly Hills 90210, Melrose Place, Part of Five 21 Jump Street – (and, later, with shows such as Simpsons, Ally McBeal and Xfiles) and (c) African Americans. As viewership grew, Fox expanded its programming into other evenings. With success, it began to de-emphasize a commitment to programming African-American themed shows.

Its problems: It has never been very successful at developing situation comedies (long the staple of television). Its only successes in the genre have been its animated shows (Simpsons, for example). In 1999-2000, Fox had a major drop in viewership and major erosion in its key target audience (young men). In 1999-2000, Fox had a spate of so-called “reality” shows. “Reality” shows are those with “real” people as opposed to trained/professional actors; they appear in loosely scripted situations. The interest in the shows is supposedly the unpredictability of the outcome – it is not scripted. Shows on police patrols, “when good pets go bad” are two examples. One of Fox’s major 1999-2000 shows came in February 2000: Who Wants to Marry a Multi Millionaire – ran into problems after the multi millionaire turned out to be not quite s rich as he claimed and because he had two restraining orders on him (to keep him away from former girlfriends). The show itself drew about 16m viewers who watched the multimillionaire bachelor pick a bride from among 50 women. The “marriage” fell apart soon after the show. The bride., Dana Carver, got an annulment. She soon thereafter posed for Playboy. Fox did not rerun the show). Fox said it would avoid material that could be seen as exploitative. Despite this promise, Fox has not backed away from so-called reality programming. In Autumn 2000, Fox had more than 90 episodes of reality series already in some stage of development, along with 25-30 hours of specials. Temptation Island best example of this. Fox has cancelled or may be just delayed some, including “Cheating Spouses Caught on Tape.” Others in the planning stage: Hotel Getaway which features couples on a free trip to an idyllic resort that actually is booby trapped to make their stay miserable with bad food, noise and obnoxious guests. The couple that stays longest wins a prize.

UPN and WB

Their parent companies are major entertainment companies which, like Murdoch, wanted to be sure they would have a place to show their programs. The immediate catalyst for UPN and WB was a court ruling that allowed CBS, NBC and ABC to own their own shows (rather than just broadcasting shows). Paramount (UPN’s parent company) and Warner (WB’s parent company) got worried about the future -- where would they put their shows? -- and so they started their own networks.

These are relatively small networks of 80-120 affiliates (so much smaller than the older networks). Their strategy has been to reach audiences that the others ignored. Both have an urban base (and thus some programming on African-American themes). UPN in particular began by targeting African American viewers and Trekkies, although it fared poorly and has been losing about $200m a year. It has rebounded in viewership in 1999-2000 with the show Smackdown on Thursdays. (More on Smackdown later). WB has targeted African Americans and youth audiences –and especially young women -- (with shows such as Dawson’s Creek, Buffy, Felicity, Roswell,etc.) . It has done fairly well, although it had a slight drop in viewership last year (1999-2000) but viewership has risen this year (2000-2001). UPN and WB each pull in about 4% of the viewing audience. In November, 2000, WB had about 4.45 million viewing households and UPN about 4.10m.

PAX. Pax. Begun in August 1998. It has vowed to show no sex, violence or foul language. Its motto: "Parent Discretion Unnecessary." It carries a lot of reruns of shows such as Touched by an Angel, Dr. Quinn, etc. although new programming is starting 2000-2001.

3. Network Audiences down.

1970 -- NBC, ABC and CBS had 95% of the total audience. 2001: Broadcasters (the 7 networks) have about 49% of the total audience. This is one of the most important points about television today: relative decline of the networks, increased competition with cable. We see a fragmenting audience. It is seldom that any one show can pull in more than 20 percent of the viewing audience.

Why is viewership down, especially for the networks?

• Internet. 50m homes wired, with 4 to 5m more per year. Internet biggest growth is in age group 18-34, which is where the networks are losing viewership.

• Cable

4. Rise of Cable.

Early 1960s, not every one could get TV, especially in rural and hilly areas. People erected antennas, ran cables from the antennas to homes. Cable. (Broadcast: over the air signal; cable -- through a wire). Tremendous growth in the 1970s, primarily due to use of geosynchronous satellites (to relay signals to cable systems). HBO an example of early success; beam programs from earth to satellite, then to receiving station at cable company. 1975: Ted Turner’s WTBS (Atlanta TV station via satellite: a "superstation"); immensely lucrative. 1980: CNN.

5. Narrow casting v. Broadcasting.

Broadcasting seeks largest possible audience, mass market. This has been a chief characteristic of the older networks. Narrow casting: Through specialized programming, seek a particular audience segment. This is efficient for advertisers (costs are lower because they are not trying to reach everyone; better focus on target audience). The newer networks and cable have excelled at this type of programming. (Magazines are a superb example of narrow casting). Narrow casting has grown greatly in the last decade. More and more special niche channels.

Discovery: Discovery Wings. Cable. Programs on planes and flying; Discovery Health. Medical News; Discovery Home and Leisure. Do It youselfer on home renovations; Discovery Civilization (ancient worlds).

MTV Networks, parent of MTV and VH1 -- has sprouted seven more offspring for different genres: VH1 country; VH1 Soul ; VH1 Smooth (Jazz and New age music); M2 (regular MTV on a different time schedule); MTV Ritmo (Latin music); MTV Rocks (hard rock and heavy metal); MTV Indie (independent music and rap).

A&E now has a Biography channel, History Channel.

Fewer than 4 million homes can receive these niche within a niche cable channels so far, but they offer a glimpse of a vastly different media universe in the not too distance future. Digital technology (which enables TV signal to be compressed to carry far more information ) is ushering in this new age when perhaps 1400 or 1500 choices will be on parade. Concerns about narrow casting: We’ll no longer have a public forum for ideas. If everyone is part of a subgroup, then there’s no "group." There’s no center, no middle and thus no common public life.

6. Satellite

From the satellite to your TV. Growth in 1990s. Companies DirectTV and Primestar. Advantages: great choice (150 to 200 channels). Drawbacks: costs high, additional costs for second TV, service charges higher; apartment dwellers need building owner’s OK.

7. Local Broadcast Stations.

Think of these as retailers. 2400 or so. Most owned by chains. Only 17 owned by African Americans. Formats: Affiliated (that is, affiliated with network, such as NBC or WB). Or Independent. Seattle Affiliates: NBC (Channel 5); ABC (4); CBS (7); UPN (11); Fox (13) and WB (10).

Affiliated stations can be very lucrative. In the top 10 markets, affiliated stations have an average of $120m revenues and profits at 45%. Average independent station brings in about half that. Why are affiliated stations more profitable? They have local and broadcast news (and local news is the largest profit maker for a station). The lower channels (2-7) are older stations, usually affiliated, and they get better reception with lowest power.

 8. Growth in choice

1960s: 3 channels (all network)

1970s: Cable arrives (HBO, Turner). 10 channels.

1980s: VCR, cable (CNN, MTV): 40 channels.

1990s: Satellite; cable expands. 60 channels

2000s: Digital compression, Satellite, Internet/TV links: 300 channels

2010s: 1000+ channels, including interactive TV, movies, virtual reality.

 Television Today.

 1. Revenues

Importance of advertisers. 100% of revenues. From the 1950s: formative years of TV. TV as a vehicle for advertising messages.

Advance advertising sales (contracted during spring, summer of 2000) for the 2000-2001 TV season for just the 6 major networks were: ABC: $2.4b; NBC: $2.4b; CBS: $1.6b; Fox $1.3b; WB: $425m

UPN: $150m (up from $110m the year before). Total advertising revenues for 1999-2000 for the networks was $16.8b (New York Times, May 15, 00)

2. What do advertisers want?

(a) Large Audiences

All things equal, bigger the better. How do you assemble the largest possible audience?

(b) Large audiences of the right kinds of people. Demographics

People generally aged 18 to 49, but tends to skew even younger (12-34 or 12-24).

Why these years? Why not older? Among people 18 to 49, most desirable targets include

Men, Young couples with children/family, Women

So: combination of large audience and demographics.

|Show |Ad rate (30 seconds) |

|Touched |$275K |

|Frasier |$475K |

|Drew |$375K |

|XFiles |$330K |

|Simpsons |$290K |

|Ally |$290K |

Nov 2000 ratings (wall street journal, 11/29/00) Primetime

NBC, 13.87m households, but 5.7m in the 18-49 range; ABC 13.86m, 5.0m; CBS 11.98m, 3.0m;

Fox 9.56, 4.6m; WB 4.45, 1.9m; UPN 4.10, 1.7m

 (c) Measured by ratings.

Assessment: how many people are watching (or listening), and what is the demographic composition of this audience.

Nielsen, the top ratings company in broadcasting today, looks at number of people viewing (for each program), household size, household income, ages of people watching, sex, race and market (size of city, urban or rural). Ratings are as old as broadcasting. Radio programs had ratings as early as the 1930s. But ratings were never more important to advertisers and to broadcasters than they are today. Ratings determine how much advertisers must pay when their commercials are telecast. With the price of TV at an all-time high, advertisers are very concerned that they get their money’s worth. Two large companies, A.C. Nielsen and American Research Bureau (ARB) conduct most of the ratings for American television today. The Nielsen Co. has a lock on national TV ratings; its national TV index (NTI) is the standard for the industry. Both ARB and Nielsen serve local TV stations as well. The rating services sell their data to the networks, advertising agencies, production companies, syndicators, advertisers, and TV stations. A major ad agency might pay as much as $1 to $1.5 million a year for a complete collection of Nielsen numbers. The TV networks pay considerably more.

The rating services provide several types of information. (1) RATING POINT = Percentage of people viewing, based on total # of HUTS (Houses using TVs). So a 20 rating would mean 20 per cent of the total. (2) SHARE = The share is a percentage of the viewing audience on that particular night, at that particular time, that watched the show. 

RATING POINT=

Number of TV homes watching (divided by) the Number of US TV homes (roughly, 100 million)

 

SHARE=

Number of TV homes watching a particular show (divided by) the Number of TV sets turned on

Examples: If 100 m homes are watching, and a show has 20 m viewing households, it has a rating of 20 and a share of 20. If 50m homes are watching and a show has 20 m viewing households, it has a rating of 20 and a share of 40.

  The success of a show is measured by its rating or its share. First: its share. A successful show will out perform others in its time slot. Second: Its rating. There are about 128 shows rated each week; of these, the bottom 10 to 20 per cent are considered failures -- no matter how many people are watching. Let’s say that the bottom rated show is drawing an audience of 1.5 m households (and then perhaps about 3 million viewers). That’s more than it would take to make it a run-a-way BEST SELLING BOOK or even a successful movie. That show , if it is bottom rated, is a failure.

Changes in ratings over the years, due to the rise of cable.

TV: Top ratings

|Show |Date |Rating |

|MASH |1983 |60.2 |

|Dallas |1980 |53.3 |

|Fugitive |1967 |45.9 |

|Cheers |1993 |45.5 |

|Ed Sullivan |1964 |45.3 |

MASH: final episode; Dallas: Who Shot JR?; Fugitive: Final Episode; Cheers: Final Episode; Sullivan: Beatles

 

BROADCAST  TV Ratings Today – for the week of March 25-31, 2002

|show |rating |

|1. E.R. |16.1 |

|2. CSI: Crime Scene |15.4 |

|3. Raymond |13.9 |

|4. Friends |13.1 |

|4 Law & Order |13.1 |

|6. NCAA Championship |11.3 |

|6 Survivor/Marquesas |11.3 |

|8. West Wing |11.2 |

|9. Yes, Dear |10.9 |

|10. JAG/Judging Amy (tie) |10.3 |

CABLE TV Ratings Today -for the week of March 25-31, 2002

|Show |rating |

|1. WWF Raw Zone (TNN) |4.6 |

|2. WWF Raw (TNN) |4.1 |

|3. NCAA Women’s B-Ball (ESPN) |3.3 |

|4.Osbournes (MTV) |2.9 |

|5.Real World XI (MTV) |2.8 |

|6. NCAA Postgame (ESPN) |2.6 |

|7. Nightmare Street (Life) |2.6 |

|8. Rugrats (Nick) |2.5 |

|9. SpongeBob (Nick) |2.5 |

|10. Rocket Power (Nick) |2.5 |

TV Ratings, December 31 to January 6, 2001-2002

|NFL Postgame Show |14.5 |

|Rose Bowl |13.8 |

|CSI Crime Scene |13.0 |

|60 Minutes |12 |

|Survivor Africa |11.9 |

|Law and Order: SVU |11.7 |

|Rose Bowl Pregame Show |11.4 |

|Friends |10.9 |

|Law and Order |10.9 |

|Fiesta Bowl Postgame |10.7 |

1999 Super Bowl ratings (January 25-31, 1999)

|Super Bowl |40.2 |

|Super Bowl Postgame |33 |

|Super Bowl Pregame |32.5 |

|Post game II |22.8 |

|Friends |13.6 |

|Frasier |13.2 |

|Family Guy |12.6 |

|ER |12.5 |

|Jesse |11.8 |

|Simpsons |11.6 |

The only kind of shows that routinely get ratings above 20 today are the Super Bowl (with ratings usually around 45) and the Academy Awards (with ratings around 30), Olympics (it depends, but 33-25 rating). The 2000 Oscars had a rating of 29.2 and a 48 share (and 79m viewers).

(d) Problems with ratings: Ratings are influenced by

(The point here is that the data generated by ratings may be inaccurate)

1. Time of show: For instance, during Autumn 1997, NOTHING SACRED, on CBS, was running at 8 p.m. on Thursday nights, in a time slot usually reserved for sitcoms. This drama show found it hard going there and NBC clearly dominates the entire Thursday night schedule with SEINFELD and the shows around it.

2. Flow. What came before your show? Any show will do well after Seinfeld (even on reruns), or after Friends or Frasier. Get the benefit of the large crowds watching those shows. Put that show somewhere else: may not draw the same numbers.

3. Counter programming. What are you up against? Will and Grace did well on Thursday evenings (after Friends -- example of flow) but when moved to Monday against Dharma and Greg, have done poorer. For instance, CBS’s critically acclaimed show “City of Hope” – one of the more promising new drama shows (starting end of 2000 season, and into fall 2001) was against ABC’s Who Wants to Be a Millionaire and NBC’s Will and Grace on Thursday at 9 p.m. It really didn’t have much of a chance in that time slot. It was 80th among prime time shows (with6.2m viewers, rating of 4.5 and share of 7). CBS killed in during the autumn of 2000.

For years, NBC has dominated Thursday evening with shows such as Seinfeld (no longer in production), Friends, Frasier (now moved to Tuesdays), ER, Will and Grace, etc. CBS will challenge NBC’s ratings sweeps on Thursday evenings this year, putting Survivor II and CSI (a new and popular show) into Thursday evenings. Survivor I was enormously popular in summer 2000, so CBS is betting that Survivor II can draw a big audience.

In response, NBC will lengthen Friends to 40 minutes to counter program against Survivor II.

The battle for younger audiences is particularly intense on Thursday nights. Movie advertisers have a special need to reach them on Thursday, the night before most films open. Movie companies often pay the highest prices of any TV advertisers. So this is the most lucrative night of the week for television ad revenues.

4. Sweeps Months. Network ratings are being done all of the time, day in and day out. But Local TV is rated only 4 times a year, during the so-called SWEEPS MONTHS of November, February, May and -to a lesser extent-- July. During these months, the networks will put on fresh programming, no reruns, blockbuster movies and miniseries.

Both local stations and networks bring out their best to entice viewers into their comer. Ratings gleaned during these months set ad rates for the local stations (and that means a total of about $24b per year) for the next three months. Other implications of RATINGS sweep months. Networks push their best programming into those months; offer more reruns in other months. During sweeps months, in recent years, the networks have used 3D hype, celebrities, and "live TV" (an episode of "ER" done "live").

5. Measurement Problems. Ratings highly inexact. Nielsen relies on just 4,000 homes -- all of regular viewers. To get into the Nielsen sample, an individual must be a regular TV viewer (more than 20 hours a week). Many Americans view TV quite selectively --but it wouldn’t do to have a TV rating system based on people who didn’t watch much TV. So: some distortion here. There is a 50-per cent turn down rate by persons asked to be in the sample. Unusually high in this sort of thing. Nielsen sample tends to over represent older people and under-represent the poor, minorities, teenagers, younger men and women and the wealthy. Only about 85 per cent of the 4,000 homes are actually in the sample at any given time. There are equipment failures, people out of town, people who quite and haven’t been replaced, etc. There is substantial turnover annually-- as high as 20 to 30 per cent. Many people watch TV outside the home: in hospitals, bars, hotels and motels, residence halls, nursing homes, prisons, military bases, etc. Nielsen itself reported in 1990 that its rating service may miss as many as 6 per cent of the people viewing TV at any given time.

For all of the sophistication in these rating systems, the ARB and the Nielsen ratings can differ by as much as 2 to 3 points. Three points is almost 3 million homes-- 6 to 7 million viewers. For a program with ratings problems, two to three points can often mean the difference between renewal and cancellation. The ratings system also doesn’t reveal much about those who watch programs they have taped with their VCRs. The current measurement tool -- people meters-- can tell when a program is recorded, but they cannot tell when it is played back. Studies have revealed that 3/4 of all programs that are recorded are not being watched WHEN they are recorded. Of these, about 80 per cent get played back. But 50 per cent of the time, viewers FAST FORWARD through commercials. ZAPPING commercials.Ratings also don’t really measure who is actually listening.

6. Special programming. Awards shows, sports, highly marketed events, mini series (during sweeps months in particular). Some regular shows replaced during sweeps months by special programming (In November 1999,Fox removed "Action" from its Thursday night lineup because the show was doing so poorly in the ratings. Substituted movies, other special programming.) Networks often offer mini series or other blockbuster shows during sweeps months. Big budget shows with exotic locations, stellar casts, special effects are common. 4-6 hours mini series. May draw large audiences (to help ratings, plug your other shows).

February 1999: Alice in Wonderland (with Martin Short, Gene Wilder, Ben Kingsley and Whoop Goldberg); Stephen King’s "Storm of the Century" (a 6 hour horror story). May 1999: ABC had Cleopatra (with Timothy Dalton and Billy Zane in starring roles), CBS had Joan of Arc and NBC had Noah’s Ark (with John Voight) and Atomic Train (disaster suspense with Rob Lowe). November 1999: ABC had Arabian Nights (filmed in Turkey, Yemen) and CBS had "Aftershock" (about NYC after a devastating earthquake).

7. Repeats. Costs have risen about 10 fold since the late 1950s. An average of just under $1 million for a sitcom episode. An average of about $1.5 million for a drama episode. (As costs have risen for 30 and 60 minute shows, the networks have been airing fewer of them -- ordering just 22 to 25 episodes - -- to cover the period from October 1 through May 1 -- 8 months -- or approximately 34 weeks. That means: a fair number of reruns of major shows during non-sweeps months. These repeats appear to drive people to cable. The major recipients are A&E, Lifetime, and Discovery. Networks hate to tell viewers that the show is repeat; even tried to get TV guide not to list the R on it. Networks marketing their own goods will tell you that the others run repeats.

 e. Advertisers also want Happy Viewers

Least Offensive Programming. Fairly positive images of a show. Can deal with serious issues -- Murphy Brown and Breast Cancer; Grace Under Fire: domestic abuse, alcoholism; Just Shoot Me: Sexual harassment; Roseanne: Abortion, body image/fat, money, difficulties at work, domestic abuse, etc. But still needs to be upbeat, funny, laughs. Don’t want to offend viewers --- want to avoid channel switching at all costs. So nothing too offensive or downbeat.

A current example of this comes with Temptation Island, Fox’s popular reality show that began airing in January 2001. The premise of the show: 4 “committed” (but unmarried) couples go to a beautiful island where they are tempted by a bevy of attractive singles. There has been some intense criticism of the show. One newspaper columnist referred to the tempters as akin to prostitutes. Em.J. Dionne Jr., a syndicated columnist (Seattle Times, January 12, 2001): “’Twenty-six fantasy singles, chosen to entice them’ and to ‘indulge desire,’ the intro tells us. Maybe this doesn’t fall under the legal definition of prostitution, but we’re talking about Fox television, so there’s no need to debate the technical terms.”

Many advertisers have been skittish about advertising on the show. Three big TV advertisers (Sears Roebuck, Quaker Oats and Best Buy) all had commercials on the first episode of Temptation Island but quickly made it clear that they did not want any more ads on the show. (Sears had not contracted for the ad; it was a “make good” ad – that is, a free commercial given for a previous audience shortfall in another show. A spokesperson for Sears: “We weren’t happy about it.” The spokesperson: Sears is a family-friend store. “This is definitely not for us.” (New York Times, January 29, 2001, C14)

Even though Temptation Island has drawn highly ratings among 18-34 year olds, its ads are selling at lower rates than the ratings would suggest (or not selling at all). The ratings are high. Had it not been for the Super Bowl and Survivor II on January 28, Temptation Island would have been the number 1 show for 18-49. Temptation Island drew only a fraction of the ad revenue committed to Survivor II, which is considered far more family friendly. Temptation Island will still be profitable – as a so-called reality show, its production costs are far below the costs for a hour-long drama show. But the profit would be greatly enhanced if some advertisers were not finding the program too offensive to touch. (New York Times, January 29, 2001, C14)

Ad slots: Two ad slots for January 24, 2001, were not even sold. Others were sold at bargain rates.

So is there any value for Fox to have a show like Temptation Island? It will make money from the show, but not nearly as much as it could with more advertising. But it will also use the show to promote other shows in its lineup, and thus work to attract more young viewers to its shows in general. Fox has been failing in recent years to do well among the 18-34 group in general, and this may help them regain some of that audience.

Fox executives said in late January 2001 that they were contemplating a second version of Temptation Island. Fox also predicted that, if the ratings stayed high, that advertisers would drop their resistance. One Fox executive: “Once a show starts popping numbers like this, it suddenly becomes art rather than trash.” (New York Times, January 29, 2001, C14)

Characters much be likable. They can be funny and outrageous -- but have to be fundamentally likable. The late Brandon Tartikoff, President of NBC Entertainment: Very few characters are allowed to adopt a viewpoint that’s as radical as, say, Archie Bunker had 20 years ago and Al Bundy had nine years ago. One of the difficulties in being as funny as you can be these days is this political correctness, which I think is the death of comedy because no one’s allowed to misbehave.

Remember the dynamics of television today. As one ABC network executive said: "The network is paying affiliates to carry network commercials, not programs. What we are is a distribution system for Proctor & Gamble." (Proctor & Gamble is the single largest television advertiser in the US).

Advertisers pull out of controversial shows; do not want their product associated with controversy.

• 30 Something. Episode in 1991 with two men in bed -- apparently after having sex -- nothing shown. Advertisers refused to advertise on that episode; loss about $1 million in revenues.

• Ellen coming-out-of the closet show, April 1997. Chrysler pulls its ads from the show, indicating that it simply does not want to be associated with any show so controversial. Company spokespeople indicate that they don’t intend to criticize or attack the show; it’s simply good business from their point of view.

• Proctor and Gamble, largest single advertiser on TV today, has a standing rule that they will not advertise on any show that deals with abortion, incest, homosexuality or abuse.

• Such episodes of overt censorship are quite rare. Programmers have learned to avoid such controversial topics or issues. A kind of self censorship is common, as much is riding on ratings. The gain or loss of just ONE PERCENTAGE POINT in the Nielsen ratings can translate into a change in advertising revenue of $30 million a year.

 3. Advertisements

American television has always been an unabashedly commercial medium and proud of it. Critic Paul Goodman once observed that " the only part of television which has fulfilled its promise at all is the commercial."

 (a) Revenue

Chief source of revenue. 100% of over-the-air broadcasters (networks), vast majority of revenue for cable.

(b). Cost of advertising.

Most ads are in 30 second formats. The cost of a typical 30-second network TV commercial has risen to $300K to $350K in the 1999-2000 season. (Costs vary, running as high as $550K on a top rated show such as ER and as low as $30,000 on a bottom rated show such as Malcolm and Eddie. During the Super Bowl or some other immensely popular show, the cost can be $750K to $1.2m 30 seconds.)

Super Bowl XXXIV, in 2000: ABC charged an average of $2.2 million for each 30 seconds of commercial time (that’s an average of $73,333 a second) with some advertisers paying as much as $3 million (Ads during the fourth quarter of the game, when viewership could be its highest, are at the higher rate).. Total of about $155m worth of advertising during the game. The 2000 rates reflect a 37.5 percent increase over Super Bowl 1999 ad rates.

Super Bowl XXXV in 2001: CBS charged an average of $2.3m for each 30 seconds of commercial time.

NBC’s top ranked ER remains the most expensive show for advertisers on network TV for a regular show. Average cost of a 30 second spot is $620k (in 2000-01 season) . NBC was the most expensive network in autumn 1999, with an average rate of $171K. NBC’s Thursday night lineup contained 5 of the 10 most expensive shows on TV (Friends, Frasier, Jesse, Stark Raving Mad and ER). CBS average rates are $163K (with a high of $312K for Everybody Loves Raymond); ABC average rate of $165K, Fox $150K, WB $53K and UPN, $29K. The least expensive show in autumn 1999 was UPN’s Malcolm and Eddie, at $17K.

The five most expensive prime time shows in fall of 2000 (cost of a 30 second ad): ER $620k, Friends, $540k, Will and Grace, $480k, Just Shoot Me, $465k, Everybody Loves Raymond, $460k. (TV Guide, October 28, 2000)

Television is a very profitable business. Networks: NBC, ABC and CBS made $700m profit in 1998 and about $850m in 1999. Local stations often have profit margins of 20 to 40 per cent. Even stations in the smallest markets have margins of 8 per cent or more.

(c) What do ads do?

First: Ideally, link advertisers with consumers. Advertisers want to reach consumers with their messages about products.

Second, ads also provide messages about ideal beauty, happiness, success.

Third, ads influence the structure of shows. TV plots are written to break naturally about every 10 minutes.

Cathy Barron (New York Times, December 14, 1997), wrote about learning to become a situation comedy writer. "We were instructed to ‘write to the money.’ Which means that no matter how much you’d love to write a script about Frasier Crane’s father, Martin, don’t. Kelsey Grammer as the title character of Frasier is the star of the show and the producers want to know that you’re capable of writing appropriately for that character. We learned about script structure through the analogy of a man getting up a tree. The setup is the man climbing the tree. The ‘act break’ (right before the first big commercial) is that OH MY GOD MOMENT when the man is now up the tree and the audience is wondering if he’ll ever get down. After the commercial comes the ‘second act complication,’ which could be his realization that there’s a hornet’s nest in the tree. Then there’s the comic block scene, which is where you get heightened comedy, the payoff. Then the resolution."

  A clutter of ads usually comes near the end of a show -- but before the last joke (or before scenes from next week). The idea is that this last little joke or scenes from next week (30 seconds long perhaps) will keep you in your seat -- through the ads.

Some 15 second ads. Many in the ad industry don’t like the 15 second ads -- worry about commercial clutter, particularly at the end of shows and before the start of the next show -- can have 10-16 short commercials. Fear that people will tune out.

(d) Many advertisements/commercials.

TV stations are licensed by the federal government and are expected to serve the public interest. In theory, a TV station that ran Too MANY ADS could be accused of not serving the public interest and have trouble getting its license renewed. In practice, that’s highly unlikely. In the 1980s, the Federal Communications Commission -- which oversees all broadcasting in the US -- instituted a program of deregulation which has diluted to a great extent any examination of a station’s performance that might be done during the license renewal process. Hence, only the broadcaster who is grossly excessive might run into problems.

For many years, most large TV stations and the major networks subscribed to the Code of Good Practices of the National Assn. of Broadcasting, which established limits on the number of commercial minutes that could be telecast each hour. The limits were voluntary but widely followed: 9 1/2 minutes of commercials during primetime; higher amounts during other times of night and day. But NAB guidelines were ruled a violation of Federal antitrust law in 1982, and the NAB code authority office closed its doors. Throughout the industry, most pledged to continue the limits -- but gradually that eroded, as networks added more time. Prime time today has an average of 15 minutes of ads per hour. That’s 25 percent of total content.

Any problem with so many ads? Viewers could object but they are poorly organized. Most see TV Commercials as the price they have to pay for "free TV." Advertisers are a more powerful lobby against commercial clutter, fearing that it will lessen their effectiveness. And advertisers have more power, given that they are the chief source -- outside of cable and PBS, the ONLY source -- of revenues for TV.

What have advertisers done? Ford had a 2 minute ad (using a roadblock method, showing it on all networks at the same time) in autumn 1999 in an effort to stand out. Ford bought up $10m in ad time on dozens of national and regional TV networks (40 broadcast and cable channels in the US alone) to run a single two minute spot. It was also shown on web sites. "Roadblock" means presenting a commercial to millions at the same time. This represented an extraordinary effort by Ford marketers to stand out in a cluttered advertising landscape. (The Ford commercial was intended to help welcome the millennium and celebrate Ford customers for their diversity. Viewers heard Charlotte Church, a 13 year old soprano, singing an uplifting tune, "Just Wave Hello," as they watched footage filed in nine countries. There were scenes of people of various races and nationalities engaged in every day activities -- such as arguing with a lover, exercising, bidding a friend goodbye, sightseeing, dancing, working out and, of course, watching TV).

 Others have tried being creative, offbeat, interesting.

(e) Creative Ways of Increasing Advertising.

NEWSBRIEFS. Added in 1978. 30 second "newsbreak" or "news brief" around 9 p.m. Appearance of a public service effort by the networks. But the newsbreaks were created by network advertising departments as a means of adding a 10-second commercial (which did not count, when introduced, as part of the NAB 9.5 min. rule). During the first full year of such newsbreaks, the networks added $30 million in revenues from the nightly 10-second spots. Local stations have since followed the networks’ lead.

PADDING PROGRAMMING: LENGTHENING MOVIES. Additional minutes of advertising are normally added when the networks broadcast long motion pictures and miniseries. Time is very tight in a 30 or 60 minute episode/sitcom/drama show; no time to be added for commercials. Films and miniseries, however, offer more flexibility. In many instances, the networks will EXTEND THE LENGTH of a theatrical film by adding minutes not included in the original cut of the motion picture. This creates a long film, providing an additional setting for commercials. When networks buy the rights to show movies, they will insist on adding film footage to the movie-- long shots, crowd scenes, etc. Sometimes, to extent playing time, networks will just run the video slower -- by about 5 or 6 per cent -- which is not discernible to the audience but provides additional time – to provide room for more ads within a larger time block.

For example, if a network can bring in $4m per hour in advertising, it could make $8m on a movie that takes up a 2-hour block of time $12m if that movie is stretched into a 3 hour time block. In January 2000, ABC showed the movie Birdcage (which ran under 2 hours in original release) in a 3 hour time slot -- using outtakes to lengthen the movie. Ads, too, were plentiful, to fill the 3 hour time slot.

PRODUCT PLACEMENT. (We’ve discussed this earlier). One of the first TV shows to use this extensively was Hawaii 5-0 in the 1970s; a United Airlines jet was frequently shown landing or taking off at Honolulu International Airport sometime during the show. United paid for that plug. Product placement is increasing primarily due to new ways of avoiding commercials -- Two companies, TiVo and Replay TV.

TiVo (Wall Street Journal, July 5, 2000). TiVo is one of several small companies developing futurist devices for interfacing with shows and watching TV. TiVo’s digital recording machine, manufactured both by Sony and Phillips Electronics, records 30 hours of programs on a hard drive and sells for about $399. The TiVo service costs about $10 a month or $199 for a lifetime subscription. One of the most intriguing features offered by TiVo and its competitor, ReplayTV Inc (Mountain View, CA) is a recorder that enables TV viewers to pause a show or a live sports event, and pick it up five minutes later at that same spot. TiVo subscribers also can eliminate commercials by fast forwarding when watching a show. TiVo Service also scans hundreds of programs listed by the networks and recommends programs to the user based on what he or she has previously selected.

TV has only about 30K+ subscribers.

Some examples of Product Placement:

1.Survivor: commercials as well as product placement for Budweiser, Reebok and Target.

2.View (ABC’s late morning talk show): deal with Campbell’s Soup. In return for an undisclosed sum, Campbell’s paid for VIEW to go to LA (in early Nov. 2000,during sweeps month). In turn, the show agreed to incorporate on air discussion sand feature segments on Campbell into eight programs of which Campbell was the primary sponsor. There were some features on cooking (using Campbell’s of course) as well as general comment. Meredith Vieira, one of the co hosts, said while sitting on the set: “I have to give Campbell’s a lot of credit because my daughter, Lily, won’t eat anything. But she eats Campbell’s Mega Noodle.” Barbara Walters responded: “Didn’t we grow up – eating Campbell’s soup?” and the co-hosts all responded: Mm!Mm! Good. In other segments, the program’s co producer, Bill Geddie, sampled a Campbell’s “soup of the day”. Criticism: raises questions about whether such an arrangement is appropriate on a show that is partly owned by and stars a leading journalist (Walters).

COMMERCIALS AS PROGRAMS/infomercials. The ultimate in using TV to make money is to turn the programming into one long commercial. Television has been doing this in two ways: with home shopping channels and with program length commercials.

HOME SHOPPING hit television in America in 1986. The Home Shopping Network is the most visible of the bunch, reaching about 60 million American homes. Through the use of 800 numbers that gave customers free long-distance dialing and the ubiquitous credit cards, HSN was shipping out between 25K and 35K items EACH DAY. 600 operators. In the first big wave in the middle and late 1980s, there were 30 stations and several networks vying for this business. By the early 1990s, only there networks were left: Home Shopping Network, Quality Value Channel and the JC Penney-Shopping TV Network.

PROGRAM LENGTH COMMERCIALS . Or infomercials as they are called in the industry - not a new phenomenon. But since the middle 1980s, vast proliferation of them. These shows frequently have the appearance of a real TV show. Some look like talk shows, interview shows, self help programs, even documentary news broadcasts. Producers and stations are required to identify these programs as advertisements only once, at the beginning of the broadcast. Critics say that viewers are often misled into thinking these are real programs; the normal defenses they erect while watching ad messages are let down. Rader Hayes, a researcher at University of Wisconsin: "Even if you know it’s a commercial, you are getting all the messages that it is a show." These are quite common on TV today-- during times in which no one else is willing to buy the space. So late night, early morning. Jay "The Juicer" Kordich, who created the market for juicers, barking at a studio audience about the healing powers of carrot juice. Juiceman sales have been running at about $75 million a year -- through these shows only. Others we’ve seen in the past 5 years:

• Cher trumpeting her Aqausentials cosmetics and Lori Davis Hair products.

• Dionne Warwick "Psychic Friends"

• Ali McGraw, Meredith Baxter and Lisa Hartman discussing Victoria Jackson’s makeup system.

• Others for health and fitness equipment, business opportunities, kitchen appliances and personal care products.

 These are also quite common in children’s TV programming, too.

PROGRAM LENGTH COMMERCIALS FOR KIDS Prior to 1984, the FCC had a strict limit on the number of commercial minutes that could be broadcast on kid’s TV. Children’s TV was the only kid of TV where the govt. mandated strict commercial limits. 12 minutes of commercials per hour were permitted on weekdays; 9 1/2 on weekends. In 1984, the FCC lifted the limit, ruling that the marketplace would determine how many commercial messages could properly be carried in kids programming.

The Toy industry began generating 30 minute cheaply animated programs featuring the denizens of toy departments. The first was HE MAN; others quickly followed: GI Joe, Transformers, She Ra, Care Bears, Pound Puppies and others. Toy manufacturers have not tried to hide the fact that programs are subsidized by money from their marketing budgets. The shows are not expected to make money. RATHER THEY ARE PART OF AN OVER-ALL MARKETING EFFORT.

In 1990, as part of the Children’s Television Act, the government reimposed a limit on the commercial minutes that could be telecast during kids programming: 12 minutes per hour weekdays; 10 1/2 weekends. The FCC was instructed to take a close look at how stations were serving kids; FCC was also ordered to take a close look at these 30-minute toy commercials. FCC investigated shows but ruled that a 30-minute animated toy-related cartoon was NOT a program length commercial if it did not include PAID ADS for the product. So a GI JOE show, if it did not have paid ads for GI JOE, would not be a program length commercial.

CRITICS OF INFOMERCIALS

1. Karen Brown, researcher at Center for the Study of Commercialism, a DC based consumer organization. "Our position is that infomercials are inherently deceptive. They are just another example of the blurring of distinctions between entertainment and advertising."

2. George Gerbner, University of Penn Annenberg School of Communications, says "Infomercials contain propaganda that is incapable of being balanced. They provide people with information about life and the world that fits a certain advertising message." All ads have a message -- but infomercials, says Gerbner, are more cloaked.

 (f) Merchandising.

Early 2000: NBC is selling jewelry inspired by soap opera "Passions." 1999: CBS sold an replica of a bracelet seen on its daytime soap opera Guiding Light (sold on the CBS web site). Industry executives expect other such promotions to rise, as networks look to sell branded me rchandise to boost revenue and cross promote their shows. NBC, for example, owns the show Will and Grace, so it may try to sell products for the show (clothes, etc.).

4. Advertisers and sleaze

Autumn 1998: Advertisers’ forum. "Forum for Responsible Advertising." Leading advertisers: Proctor & Gamble, Ford, Sears, Johnson and Johnson, Coke. “We want access to high quality, family-friendly programming that attracts a mass audience," says P&G spokesman Gretchen Briscoe. "It’s going to take a collective industry effort." Heavy clout from this group. P&G: $1.5 billion on broadcast TV, cable and radio in 1998. Ford: $575m, Sears $364m, Johnson and Johnson $669m, Coke $325m. Total: Nearly $3.4billion. Impact? Despite all of this, money still flowing to shows that are hardly considered "family friendly" -- such as Friend, Just Shoot Me. Both have a heavy dose of sexual themes.

Wall Street Journal. 8/11/99 "Big Advertisers To Commission TV Scripts for Families."

A group of major advertisers (Proctor & Gamble, GM, IBM, Johnson and Johnson, Sears Roebuck, AT&T and Wendy’s) are joining together to sponsor "cleaner" shows. They say they are fed up with sex and violence on prime time TV, so they are footing the bill for as many as 8 "family friendly" pilot scripts for shows to run on Time Warner’s WB network. Costs are about $1m, which is less than they might spend to air commercials during a single week of prime time programming. Scripts could be aired as early as autumn 2000. P&G says it won’t meddle with the writing of the scripts. Some industry observers wonder if WB can pull this off: offering so called "family friendly viewing" while still drawing an audience. However, others note that WB’s "7th Heaven" -- clearly a family friendly show -- has done quite well (and is the most watched show on WB).

WB’s Gillmore Girls is the first show developed under this arrangment.

5. Television costs

a. Production. A small number of program factories produce most of the TV that Americans view. Tens of thousands of hours of programming are telecast each week over about 60 TV networks (cable and over the air networks) and 1200 local TV stations. The biggest producers are: Disney, Warner, Paramount, Columbia, Viacom and Fox.

b. Losing money on the first run. Typically, for all but the most popular series, the production company loses money for each episode of a drama or situation comedy it produces. The licensing fees paid by the networks to telecast the program simply do not cover the costs of making the programs.

c. Examples of costs. A two-hour TV movie costs $4m to $5m; networks are willing to pay between $3.5 and $4.5 for most of these movies. Single episode of a 60 minute dramatic program can cost as much as $2m. Producer can lose $500K to $750K per episode when the program is licensed for network viewing.

An hour of a so-called “Reality” show (such as Survivor or Big Brother) can cost as little as $200k.

d. Why are costs so high?

• Labor costs are high (union wage scales, overtime, huge salaries for stars)

• In dramas, location shooting rather than studio shooting is common -- and more expensive.

• Series can be very expensive. When it was on the air in the 1980s, Miami Vice, for example, was one of the most expensive weekly series ever produced for TV. The producers were losing so much money on it that they threatened to move the production from Miami to California to save money. NBC increased its payments to the producers, but this did not significantly reduce the deficit)

e. Results of high costs

• The high cost of programming is one of the reasons there are so many situation comedies and reality programs (e.g., Unsolved Mysteries) on TV today. They are usually much cheaper than drama shows (such as Law and Order, NYPD Blue).

• Many low cost entertainment/"news’ shows such as Entertainment tonight, American Journal, Hard Copy, so-called “Reality” shows

• Changes in production, notably shooting outside Southern California. Vancouver BC a common place these days for a lot of shooting (union wages much lower than Southern California; production costs can be as much as 20 per cent less in Canada).

• High tech and action scenes, from other films, are inserted into shows. Saves money.

f. Why do producers persist, even when losing money?

• Reruns. Lucrative prospect of competing a sufficient number of episodes (usually about 100) to put the show into reruns on local TV stations or cable networks.

• Producers own the shows. When the shows are first broadcast on a network, the network only pays for the right to show the program 2 or 3 times. The producers can then sell the rights to others to show the program.

• The revenues from the secondary sales is almost all profit. The original costs have all already been paid.

• Most of the money will go to the producers (although some will go to the stars).

• Both local TV and some cable networks thrive on showing these ‘off network" reruns.

• Stripping. Instead of showing a single episode each week (as the networks do during the first run of a program), the station shows a different episode each day. 5 days a week. This is called Stripping.

• The individual price per local station may not be terribly high for a show such as "Head of the Class," but if 250 to 300 stations pay for the rights to show the program, the total amount of money that goes to the producer can be huge.

• Some reruns are enormously popular. When the Cosby Show first went into reruns in 1990, it frequently drew larger viewing audiences that new shows. The same has held true for Seinfeld. Reruns of Seinfeld have often been #1 in their time slot, beating out new programming.

• The Cosby show earned $4.8 million per show in reruns. Friends in reruns getting about $4m per show (that is, Warner TV, which created the show, earns about $4m per episode in reruns; these are often 2x airings – that is, the station can air the show twice).

• Most series do not go into reruns, but enough do to make all of this profitable overall.

6. Network ownership of shows. Until the early 1990s, networks were not allowed to own their own shows. The US government feared that the networks would monopolize TV if they both owned the shows and showed them. But with the rise of cable, there clearly was no way that the networks could monopolize the industry -- and by the early1990s, networks were allowed to own their own shows.

As the competition for shows that will draw broadly as increased, so too have the licensing fees. NBC paid $13m per show for ER in a 5 year deal (starting in 1998). ER is not produced by NBC, not owned by NBC. But NBC needed the show, as it draws well with young men. When Seinfeld retired from his show, NBC needed a show that would continue to draw the young male audience. So ER was worth a great deal to them, and they had to pay a lot for it.

NBC is paying about $6m per episode for Friends and $4-$5m per episode for Frasier. (The stars on Friends re-negotiated their per episode fee in summer 2000 as part of an agreement to extend the show 2 years. Each of the 6 key stars had been earning about $125k per episode; under the new arrangement for the last two years of the show, each gets $750k per episode. Typically the show has about 22 –24 episodes per year. 22 episodes = $16.5m per person). That will rise to $1m per episode for 2002-3.

Given this kind of rising cost, there is a great deal of pressure for the networks to develop their own shows. It will clearly cut costs; they won’t have to bargain with producers. CBS owned a stake in all of its new shows in autumn 1999, as do Fox and NBC.

  NBC owns Will and Grace, which explains its enviable time slot (Thursday evening), long a powerhouse night for NBC.

................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download